Question

Assume the company uses a weighted average process costing system.

During the current period 5,000 units were transferred in (cost $140,000) to Department B.

In Department B materials were added costing $25,000 and conversion costs of $60,000 were incurred.

A total of 4,800 good units were transferred to finished goods.

Direct materials are added at the beginning of the process.

Beginning WIP: 1,000 UNITS, 40% complete
   Direct materials costs = 4,070
Conversion costs = 6,008
   Transferred-in-cost = 10, 080

Ending WIP: 1,200 UNITS, 30% complete

What is the value of: a) ending WIP and. b) the goods transferred out?

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				1,000.00
Add: Units Started in Process				5,000.00
Total Units to account for:				6,000.00
UNITS TO BE ACCOUNTED FOR:
Units started and completed				4,800.00
Ending Work in Process				1,200.00
Total Units to be accounted for:				6,000.00
Equivalent Units:
			Transferred in Cost		Material Cost		Conversion Cost
			% Completion	Units	% Completion	Units	% Completion	Units
Units started annd completed			100%	4,800.00	100%	4,800.00	100%	4,800.00
Ending Work in Process			100%	1,200.00	100%	1,200.00	30%	360.00
Total Equivalent units				6,000.00		6,000.00		5,160.00
TOTAL COST TO ACCOUNT FOR:
			Transferred-in		Material		Conversion
Beginning work in Process			10,080		4070		6,008
Cost Added during May			140,000		25,000		60,000
Total Cost to account for:			150,080		29,070		66,008
Total Cost to account for:							245,158
COST PER EQUIVALENT UNIT:
			Transferred-in		Material		Conversion
Cost added during the period			150,080		29,070		66,008
Equivalent Units			6,000.00		6,000.00		5,160.00
Cost per Equivalent unit			25.01		4.85		12.79
TOTAL COST ACCOUNTED FOR:
Completed Units (4800 units)
			Equivalent unit		Total Cost
Transferred-in cost			4,800.00	25.01	120048
Material cost			4,800.00	4.85	23280
Conversion Cost			4,800.00	12.79	61392
Total cost of Units completed					204,720
Ending Work in Process (1200 units)
			Equivalent unit		Total Cost
Transferred-in cost			1,200.00	25.01	30012
Material cost			1,200.00	4.85	5820
Conversion Cost			360.00	12.79	4604
Total cost of Ending Work in process:					40,436